The first reduction, much anticipated, offers a breath of fresh air to borrowers. But the continuation of the movement is uncertain given the rebound in inflation.
The last time the European Central Bank lowered its rates was on September 18, 2019. It then kept them in the negative zone for a long time, where they had been since 2014, before undertaking, from July 2022, the most sudden increase in the cost of money, going from -0.50% to 4% in September 2023, in reaction to the inflationary crisis. This Thursday, it is, in all likelihood, preparing to reduce its key rates by 0.25 points. To the great relief of those involved in the economy: borrowing households, businesses, indebted states… The grip is starting to loosen, bringing some oxygen to the economy.
Alas, the movement launched during this meeting of the Board of Governors in Frankfurt may not have the scale anticipated for months. At the start of the year, the markets were expecting the start of a steady monetary easing which would have seen rates fall sharply by the end of the year. We even wondered what the…
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